Is the energy sector in crisis?

China is already working hard to deliver on those opportunities. Lessons will be learned from the earthquake-tsunami-damaged Fukushima Daiichi nuclear power plant in Japan as China continues with its plans to build new, safe and modern nuclear reactors.

Despite the many issues associated with projects, the ability to supply power from facilities such as the Three Gorges Dam has proved how valuable renewable energy will be as we move forward. China is a world leader in producing renewable technologies. The massive challenge to invest in and smarten the electricity grids will ensure that bottlenecks are removed and power is supplied to cities and more rural areas, unlocking the potential of the whole country. The new State Grid DC line is a great achievement but much more needs to be done to secure the opportunity.

Energy efficiency projects such as the "Top-1000 Energy Consuming Enterprises Program" show the impact that reducing energy use can have on the overall supply chain. The forthcoming initiative with the Asia-Pacific Economic Cooperation to create a low-carbon model town forum should lead to more efficient use of energy. This is a vital area where the public can play its part in securing the opportunity.

But coal continues to be the largest source of energy in China, representing about 79 percent of the overall electricity mix as opposed to only 1.9 percent for nuclear. This presents difficult choices when one considers the potential impact that continuing with this approach could have on climate change. China is committed to diversifying the energy mix but even on current projections coal will remain the main provider of energy until at least 2025.

Can China demonstrate global leadership and deliver on development and upgrade of carbon capture and sequestration? Much is being done in the country to identify effective ways to scale the theoretical models into fully integrated projects that will result in tangible reductions in carbon dioxide emissions. The $1-billion GreenGen demonstration power plant is due to become operational later this year, with the first phase estimated to generate 250 MW of power, heat and synthetic gas. This is an important development, but much more is needed.

The government has recognized the opportunity and will host the 2011 Carbon Sequestration Leadership Forum Ministerial Meeting in September to discuss these challenges. And the World Energy Council is delighted to support this initiative.

As we have seen in other countries where supply does not keep pace with demand, there is the risk of heavy industries, including mining and large-scale manufacturing, or for that matter the entire economy being critically affected. That in turn would lead to the stifling of the much-vaunted growth.

So is the Chinese energy sector in crisis? No, probably not in crisis, but there are risks and there are real opportunities as long as we keep in mind the Chinese proverb, "without rice, even the cleverest housewife cannot cook".

The author is secretary-general of the World Energy Council, an alliance of more than 90 countries that provides information and resources on all aspects of energy.

(China Daily 05/26/2011 page9)

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